Long blocks make buoyancy only when its base point is under the water.
The sample below is all made of wooden beams, whose base point is at the top.
This seems to be sinking, but actually "floats" at the -3m altitude.

The ships just stay there. They are trying to move, but physics has just seemingly been disabled for no reason.

At last the Blocky State Glitch resurfaces!
Sorry if I'm a bit happy so now it will be dealt with.
I have videos, attached logs and blueprints, even game saves there.

In essential the game only loads units near to your viewpoint, regardless of the range setup in video options.
Units further away remain blocky, cannot fire, and cannot be targeted.
I could "solve" it by flying my viewpoint from one unit to the another repeatedly, still if they were big and far away, I could just force to load one unit, while the enemy reverts to blockyness, and vice versa.

But more about it with heavy details on the link above.
Hope this helps.